10-QPeriod: Q1 FY2012

EQUINIX INC Quarterly Report for Q1 Ended Mar 31, 2012

Filed April 27, 2012For Securities:EQIX

Summary

Equinix Inc. (EQIX) reported solid financial results for the quarter ended March 31, 2012, with revenues increasing by 25% year-over-year to $452.2 million. This growth was driven by strong performance across all geographic regions, particularly in the Americas, which benefited from the ALOG acquisition. The company also saw a significant improvement in operating income, up 42% to $101.1 million, and adjusted EBITDA, which rose 29% to $215.2 million. Key financial highlights include a robust increase in cash and cash equivalents, up to $632.9 million from $278.8 million at the end of the previous year, supported by strong operating cash flows and effective investing activities. The company continues to invest in expansion projects, with significant capital expenditures and purchase commitments noted. Despite a substantial debt load, Equinix maintains a positive outlook, with plans to become free cash flow positive in 2013.

Financial Highlights

52 data points
Beta

Revenue

$443.25M

50.1% Gross Margin

Net Income

$32.12M

7.2% Net Margin

EPS (Diluted)

$0.67

Total Assets

$5.88B

Cash & Equivalents

$632.94M

Free Cash Flow

-$19.50M

Financial Statements
Beta
Revenue$443.25M
Cost of Revenue$217.10M
Gross Profit$222.21M
Operating Expenses$342.50M
Operating Income$100.75M
Interest Expense$52.82M
Net Income$32.12M
EPS (Basic)$0.69
EPS (Diluted)$0.67
Shares Outstanding (Basic)46.95M
Shares Outstanding (Diluted)51.06M

Key Highlights

  • 1Revenue increased 25% year-over-year to $452.2 million, driven by growth across all geographic segments.
  • 2Operating income grew 42% to $101.1 million, demonstrating improved operational efficiency.
  • 3Adjusted EBITDA increased 29% to $215.2 million, indicating strong operational performance excluding non-cash items.
  • 4Cash and cash equivalents significantly increased to $632.9 million, up from $278.8 million at the end of 2011, reflecting healthy cash generation.
  • 5Capital expenditures remain substantial, reflecting ongoing investment in data center expansion and infrastructure development.
  • 6The company successfully managed its debt, with a significant portion of convertible notes converted in April 2012.
  • 7Customer count grew 19% year-over-year, indicating strong market demand and successful customer acquisition.

Frequently Asked Questions

Equinix's revenue for the three months ended March 31, 2012, was $452.2 million, representing a 25% increase compared to $363.0 million in the same period of 2011.

The ALOG acquisition, which closed in April 2011, contributed to revenue growth, particularly in the Americas region. It added $18.7 million in revenue and $11.7 million in cost of revenues for the first quarter of 2012.

Equinix believes it has sufficient cash and cash equivalents, along with anticipated cash from operations, to meet its operating requirements and complete announced expansion projects. The company held $1.1 billion in cash, cash equivalents, and investments as of March 31, 2012, and aims to be free cash flow positive in 2013.

Interest expense increased due to the impact of the $750 million senior notes offering in July 2011 and additional financings for expansion projects, including capital lease and other financing obligations.